If things weren’t bad enough for the UK government at the moment, the news that Ladbrokes will be joining William Hill in moving their online gaming operation to Gibraltar must have caused further upset at No.10 and of course the Treasury. The announcement made today by Ladbrokes that they too will also be moving their online gaming operation - which undoubtedly will include their online bingo division - to ‘Gib’ by the end of the year, has been the topic of much industry speculation since William Hill made their announcement to relocate to Gibraltar.
Only a matter of time before the rest follow?
A report in today’s Guardian states that it is now official, Ladbrokes are moving to Gibraltar. The article highlights the reasons why they have decided to make the move which mostly is to take advantage of the lower taxation on offer, but it is also likely that there will be further advantages to making the move. Gibraltar is a recognised centre for gambling and online betting so legislation is already geared towards the internet bingo and gaming market, but the added advantage of most Gibraltarians being bilingual (most speak English and Spanish) will not have gone unnoticed. The advantages to Ladbrokes – and of course William Hill - of this aspect of the move will be that it will no doubt assist with gaining a more secure foothold in the European market with a multi-lingual workforce.
Whose sorry now Mr Brown and Mr Darling?
It is a sad fact for the UK government that they partly have themselves to blame, for this start of a mass exodus to tax havens abroad. Because although they offered tax breaks to bookmakers way back in 2001, they more recently have turned a deaf ear to reason regarding heavy taxation on the bingo industry. This attack on the bingo industry has not only alienated many in the industry but in so doing, has caused alarm bells to start ringing about possible swingeing taxation for other gaming sectors in the future. The UK government could look down their noses loftily and attack the likes of Ladbrokes and William Hill for breaking a ‘gentleman’s agreement’, however when the government are seen by the public effectively rifling through granny’s purse for loose change in their recent tax attack on the bingo industry, any hint of support goes out the window.
For Ladbrokes and William Hill of course, the reasons for moving are more black and white, the corporate balance sheet is the most important thing, it is estimated that the move to Gibraltar will save William Hill in the region of £7m a year and how much Ladbrokes fortunes will improve has not as yet been estimated by analysts. All companies no matter who they are or where they are ‘adding value’ to their operation by any means they can, so if it means moving online bingo and gaming or telephone call centres somewhere where it cost less to operate then so be it! And really who can blame them, the Guardian has a quote from Chief Executive of Ladbrokes, Christopher Bell and he has said that it would "materially improve the competitiveness and operating margin" of Ladbrokes eGaming division.